WATCH PRICES: “as soon as a price goes up, they look elsewhere”

ith the democratisation of intercontinental
travel prices and the opening
up of China, which began sending ever
greater streams of tourists all over the
world, shopping tourism became crucial
for the watch industry.

But these streams of tourists proved extremely
volatile. The recent example of
the tourism boom to Japan, fuelled by the
fall in value of the yen, or that of London
after the Brexit vote, are perfect illustrations
of this.

The moment the yen was depreciated in 2012, the number of
Chinese and Asian tourists travelling to Japan rose 34%, then
by 24% in 2013, by 29% in 2014 and by 47% in 2015.
This rise is clearly visible in the statistics on Swiss exports to
Japan, which rose 5.7% in 2013, then leapt
by 15.2% in 2014 before stalling slightly, falling
back 1.9%, from late 2015 onwards and
continuing to drop during 2016, losing
more than 4% compared with the same
period in 2014 (January–September).
The effect of Brexit on Swiss watch exports
to the UK was even more radical: up 23.5%
in August 2016, and 32.4% in September!
And in the case of Europe or the Middle
East, this opportunistic shopping tourism
and this volatility have been further
accentuated by political factors, war,
and the wave of terrorist attacks that has
struck Europe.

René Weber of Vontobel uses a very special “index” to evaluate Chinese and Asian tourist flows into Switzerland: the Jungfraubahn index.

By closely following the state of advance bookings for this high-altitude train, which is very popular with Asian tourists, he is able to forecast watch sales in Switzerland with great accuracy. For example, even before the terrorist attack in Nice on 14 July, he had already observed a 30% cancellation rate by Chinese tourists.

“As soon as a price
difference exceeds 10%,
customers know about
it and choose their
destination according
to price. And as soon
as prices go up, the
tourists leave. There
was greater inertia in the
past. Now, people make
very quick decisions.
The internet has been
a game-changer too.”
René Weber, Vontobel